Obama, in Shift, Says He’ll Reject Public Financing

Citing the specter of attacks from independent groups on the right, Senator Barack Obama announced Thursday that he would opt out of the public financing system for the general election.

His decision to break an earlier pledge to take public money will quite likely transform the landscape of presidential campaigns, injecting hundreds of millions of additional dollars into the race and raising doubts about the future of public financing for national races.

In becoming the first major party candidate to reject public financing and its attendant spending limits, Mr. Obama contended that the public financing apparatus was broken and that his Republican opponents were masters at “gaming” the system and would spend “millions and millions of dollars in unlimited donations” smearing him.

But it is not at all clear at this point in the evolving campaign season that Republicans will have the advantage when it comes to support from independent groups. In fact, the Democrats appear much better poised to benefit from such efforts.

Republican activists have been fretting about the absence so far of any major independent effort, comparable to Swift Boat Veterans for Truth, which helped undermine Senator John Kerry’s campaign in 2004, to boost Senator John McCain, the presumed Republican nominee, who has badly trailed Mr. Obama in raising money.

“As of today, he’s looking for ghosts that don’t exist,” Chris LaCivita, a Republican strategist who helped direct the Swift Boat effort, said of Mr. Obama’s rationale for rejecting the financing.

Mr. Obama’s decision, which had long been expected given his record-breaking money-raising prowess during the Democratic primary season, was immediately criticized by Mr. McCain, who confirmed Thursday that he would accept public financing.

“This is a big, big deal,” said Mr. McCain, of Arizona, who was touring flooded areas in Iowa. “He has completely reversed himself and gone back, not on his word to me, but the commitment he made to the American people.”

Mr. Obama’s advisers said Thursday that they believed he could raise $200 million to $300 million for the general election, not counting money raised for the Democratic National Committee, if he were freed from the shackles of accepting public money.

Signaling how his ability to raise record amounts was already affecting the race, Mr. Obama, of Illinois, on Thursday released his first advertisement of the general election, spending what Republicans estimated as $4 million in 18 states, including some that Democrats have not contested in recent elections.

In making its decision to bypass public financing, the campaign declined an infusion of $84.1 million in money from federal taxpayers. The decision means that Mr. Obama will have to spend considerably more time raising money — he will head to California next week to open the effort — at the expense of spending time meeting voters.

To make the exchange worthwhile, aides said, Mr. Obama would need to raise at least twice as much money than he would have received under public financing, with a goal of raising three times as much. But in 17 months of raising money for the primary campaign, the Obama campaign has amassed a record 1.5 million individual contributors. Those are the first people the campaign will approach for general election donations.

The public financing system limits the amount of money that campaigns can spend in return for the public money. It was set up to reduce the influence of private donations in the political process.

According to aides, Mr. Obama reached his decision knowing he might tarnish his desired reformist image — he pledged last year to accept public financing if his opponent did as well — but strategists for the campaign made the calculation that it was worth it, in part, because of the potential for the Republican National Committee to seriously out-raise its Democratic counterpart. The Republican committee finished May with nearly $54 million in the bank, compared with just $4 million for the Democratic National Committee.

“It’s a gap, to say the least,” said Robert Gibbs, the campaign’s communications director, of the disparity in party fund-raising.

There are limitations, however, to the use of party money that Mr. McCain is expected to rely on. Only about $19 million of it can be spent in a coordinated manner with the party’s presidential candidate, although the party can spend an unlimited amount without coordinating with the campaign. The party and the candidate’s campaign can also split the costs of “hybrid” advertisements that must be worded in such a way that refers to both the presidential campaign, as well as other party candidates down the ticket, which media strategists say can be cumbersome.

Photo

Senator Barack Obama announced his decision not to accept public financing. Mr. Obama, right, in discussion on his campaigns plane, with Reggie Love, a staff member, nearby, on Thursday.Credit
Alex Brandon/Associated Press

Early last year, before he became a money-raising phenomenon, Mr. Obama floated in a filing with the Federal Election Commission the possibility of working out an agreement with the other party’s nominee to accept public financing if both sides agreed. Later, when asked in a questionnaire whether he would participate in the system if his opponent did the same, Mr. Obama wrote, “yes,” adding, “If I am the Democratic nominee, I will aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election.”

Although Mr. Obama pledged more recently to discuss a deal with the McCain campaign, Mr. McCain’s aides said that there were never any real negotiations.

The size and focus of Mr. Obama’s new advertising campaign left no doubt that he was prepared to spend his money in ways that Democrats could only dream about four years ago.

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Among the 18 states where his advertisements will begin running on Friday are Alaska, Georgia and Montana — states so reliably Republican that neither party has seen fit to advertise in them in any big way during the past few presidential contests.

“I think the last guy to buy Georgia was General Sherman,” said Alex Castellanos, a longtime Republican advertising strategist. “It’s a very aggressive general election strategy. With his kind of resources, you’re not just buying swing states. He’s trying to put new states in play.”

On paper, Mr. Obama is playing catch-up to Mr. McCain, who began his advertising campaign two weeks ago. But Mr. McCain’s campaign has been largely focused on roughly 10 states that have been traditional battlegrounds during presidential campaigns, including Michigan, Ohio, Pennsylvania and Wisconsin.

Mr. Obama, who has sharply criticized the influence of money in politics and has barred contributions from federal lobbyists and political action committees to his campaign and the party, announced his decision Thursday in a videotaped message to supporters. He argued that the tens of thousands of small donors who had fueled his campaign over the Internet represented a “new kind of politics,” free from the influence of special interests.

The Obama campaign highlighted Thursday the fact that 93 percent of the more than three million contributions it had received were for $200 or less. But Mr. Obama has also benefited from a formidable high-dollar network that has collected more money in contributions of $1,000 or more than even Senator Hillary Rodham Clinton’s once-vaunted team of bundlers of donations.

Indeed, Mr. Obama stands to receive a significant boost from fund-raisers who formerly supported Mrs. Clinton, of New York.

Michael Coles, a former Clinton fund-raiser from Atlanta, said in an interview that he was one of 20 to 30 Clinton supporters who joined Mr. Obama’s national finance committee at a meeting on Thursday in Chicago. Members of the committee have each pledged to raise $250,000 for Mr. Obama.

People from both camps said they expected most of Mrs. Clinton’s top fund-raisers to align behind Mr. Obama, and that they could raise at least $50 million for him.

Mr. Obama, however, cast his decision on Thursday as a necessary counter to unscrupulous supporters of Mr. McCain’s.

“We’ve already seen that he’s not going to stop the smears and attacks from his allies’ running so-called 527 groups, who will spend millions and millions of dollars in unlimited donations,” Mr. Obama said.

Mr. McCain has been highly critical in the past of 527s and other independent groups, but he seems to have softened his rhetoric lately, saying his campaign could not be expected to “referee” such groups.

Nevertheless, Republican strategists said many affluent donors who might be in a position to finance 527 groups were wary this time because of the legal headaches that bedeviled many of these groups after the 2004 election, as well as the possibility they might incur the wrath of Mr. McCain.

The Obama campaign has urged its major fund-raisers not to give to outside groups and cited the decision recently by the leaders of Progressive Media USA, which had been expected to be the major Democratic independent television advertising effort, to shut down, as proof that Mr. Obama’s instructions were having an effect.

Activists on the left, however, said they sensed the campaign was mainly concerned about advertising by independent groups, wanting to be able to control Mr. Obama’s message, but was willing to accept help from outside groups doing other activities on his behalf, like voter registration and turning out voters.

“It’s my understanding that they were primarily focused on the 527s dealing with radio and TV ads,” said Martin Frost, president of America Votes, a major 527 effort, which is actually an umbrella organization for more than 30 liberal groups, concentrating on coordinating their respective efforts to get out the vote.